Frost & Associates, LLC
Call Today 202-618-1873

Court provides clarity on standard of proof in FBAR dispute

The United States of America filed suit against a taxpayer for his alleged “willful” violation of the requirement to report an interest in a foreign account. The government had already established the taxpayer was required to file a Report of Foreign Bank and Financial Accounts (FBAR). The court is asked to determine which standard of review is required to establish if the violation was willful.  

What was the outcome of the case? The government argued it only needed to establish the violation was willful by the preponderance of the evidence standard. The taxpayer countered that the clear and convincing evidence standard was more appropriate for this case. The clear and convincing standard is a more rigorous standard.

Ultimately, the court’s analysis turned to precedent. In the past, courts have often required the government meet the clear and convincing evidence standard in cases that involve “particularly important individual interests or rights.” Examples include issues of deportation and the termination of parental rights. The court reasoned that the penalties tied to this violation did not rise to this same level. As such, the preponderance of the evidence was appropriate.

What does this mean for taxpayers? Essentially, this ruling makes it easier for the government to establish that a violation of foreign asset reporting requirements was willful. A violation generally receives a civil penalty that will not exceed $10,000. If deemed willful, the penalty increases to $100,000 or 50 percent of the value of the account at the time of the alleged violation, whichever is greater.

It is also important to point out that this was a civil case. Criminal cases for FBAR violations can also include the threat of imprisonment. As such, any taxpayer under investigation by the IRS is wise to gather evidence to support his or her innocence. An attorney experienced with international tax law matters can help.

No Comments

Leave a comment
Comment Information
Every Tax Problem Has A Solution

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Contact us today!

Frost & Associates, Attorneys at Law
1629 K Street NW, Suite 300
Washington, D.C. 20006

Phone: 202-618-1873
Phone: 202-505-6959
Fax: 888-235-8405
Washington Law Office Map

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 202-618-1873
Phone: 202-505-6959
Fax: 888-235-8405
Columbia Law Office Map

Annapolis Office
888 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 202-618-1873
Phone: 202-505-6959
Fax: 888-235-8405
Map & Directions

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 202-618-1873
Phone: 240-599-5009
Phone: 202-505-6959
Fax: 888-235-8405
Map & Directions

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 202-618-1873
Phone: 703-621-7169
Phone: 202-505-6959
Fax: 888-235-8405
Map & Directions

Find us on...
  • Facebook
  • Twitter
  • Linked In